Rare Element Resources
Bear Lodge Project
Canadian NI 43-101 Technical Report
October 9
th
, 2014
10135-200-46 - Rev. 0
19-2
Government stockpiling of rare earths as strategic materials by countries
including China, the U.S., and several European countries;
Geopolitics, environmental considerations, remote locations, high capital
costs, and limited access to capital, which could constrain new RE supply
growth;
The advent of secure rare earth supplies outside of China which could serve
to increase efforts toward development of new applications for rare earths;
and
China becoming a net importer of certain rare earths within the next several
years, due to the constraints noted above causing the Chinese RE industry to
be unable to meet growing demand.
19.2 Supply
The estimated growth of annual global rare earth production over the past 30 years
has averaged 5% per annum, with the bulk of this increase driven by China’s
expansion of domestic mine production. Most non-Chinese mine production of rare
earths was shut down during this same timeframe, leaving the Chinese to dominate
global RE supply over the past decade or more. Chinese deposits produced an
estimated 90,000 tonnes of total RE in 2013, or approximately 86% of global mine
production. China produces an even greater proportion of the world’s heavy rare
earths.
Stockpiles and a limited amount of recycling also contribute small amounts of supply
to the global rare earths market. Stockpiling is a market phenomenon which affects
apparent supply, but about which there is virtually no information available. From
various market reports, it appears that stockpiles built up during the extraordinary
2010-11 spike in RE prices have reduced apparent demand since that time and
contributed to the recent downward overcorrection in prices. Some market sources
believe that stockpiled supplies are still an important factor in keeping rare earth
prices depressed, but that these might be largely depleted sometime in 2015.
Because rare earths are typically used in small quantities and often alloyed within
components that make up only a portion of the mass of larger products (e.g., they are
key elements to allow for miniaturization of products), recovery of rare earth materials
by recycling tends to be costly, inefficient and complex. It is estimated that only about
2% of rare earths used globally are recycled, so recycling provides a very limited
source of supply.
